FireEye Software Security Firm Gets Price Target Hike

FireEye (FEYE) stock got a price target hike on Tuesday, on the heels of its $1 billion acquisition last week of Mandiant, and the stock hit another record high.

Analyst Rick Sherlund at Nomura raised his price target on FireEye to 65 from 51. The upgrade follows a presentation FireEye held with analysts in New York on Monday to provide greater detail on its expanding road map.

FireEye stock was up nearly 4%, near 60.75, in afternoon trading in the stock market today.

When FireEye announced its acquisition of Mandiant on Jan. 2 after the market close, it also boosted Q4 guidance above consensus expectations, as IBD reported. The stock rose 39% the following day.

"We remain confident in the company's ability to report outsized growth and exceed estimates," Sherlund wrote in a research note. He based that on the Mandiant acquisition and FireEye's "unique positioning in the fastest-growing segment of the software security market."

Other analysts earlier applauded the acquisition, calling it shrewd and game changing, as IBD reported.

FireEye, founded in 2004 and based in Milpitas, Calif., has developed computer security technology geared toward detection of the newest kinds of cyberattacks. These next-generation threats are significantly harder to detect. They mutate quickly, making it difficult for traditional security technology to identify, as IBD explained in this pre-IPO profile on FireEye.

FireEye completed its initial public offering on Sept. 20. The stock priced at $20 and rose 80% on the first day of trading. FireEye has seen rapid sales growth amid steep losses, as it invests heavily in sales and marketing and product development.

According to Sherlund, "FireEye believes that its acquisition of Mandiant will not change its long-term operating model, which should see sales and marketing expense fall to the mid-30% range of revenue, from almost 100% of revenue currently."

FireEye is slated to report Q4 earnings on Feb. 11, after the close. The consensus estimate of analysts polled by Thomson Reuters is for revenue of $55.6 million, up 75% from the year-earlier quarter. They expect a per-share loss minus items of 37 cents, vs. an 11-cent loss in the year-earlier quarter.

With Mandiant, FireEye now expects 2014 revenue of $400 million to $410 million, compared with its previous guidance of $240 million to $250 million. That's vs. $83 million in 2012.

FireEye (FEYE) stock got a price target hike on Tuesday, on the heels of its $1 billion acquisition last week of Mandiant, and the stock hit another record high.

Analyst Rick Sherlund at Nomura raised his price target on FireEye to 65 from 51. The upgrade follows a presentation FireEye held with analysts in New York on Monday to provide greater detail on its expanding road map.

FireEye stock was up nearly 4%, near 60.75, in afternoon trading in the stock market today.

When FireEye announced its acquisition of Mandiant on Jan. 2 after the market close, it also boosted Q4 guidance above consensus expectations, as IBD reported. The stock rose 39% the following day.

"We remain confident in the company's ability to report outsized growth and exceed estimates," Sherlund wrote in a research note. He based that on the Mandiant acquisition and FireEye's "unique positioning in the fastest-growing segment of the software security market."

Other analysts earlier applauded the acquisition, calling it shrewd and game changing, as IBD reported.

FireEye, founded in 2004 and based in Milpitas, Calif., has developed computer security technology geared toward detection of the newest kinds of cyberattacks. These next-generation threats are significantly harder to detect. They mutate quickly, making it difficult for traditional security technology to identify, as IBD explained in this pre-IPO profile on FireEye.

FireEye completed its initial public offering on Sept. 20. The stock priced at $20 and rose 80% on the first day of trading. FireEye has seen rapid sales growth amid steep losses, as it invests heavily in sales and marketing and product development.

According to Sherlund, "FireEye believes that its acquisition of Mandiant will not change its long-term operating model, which should see sales and marketing expense fall to the mid-30% range of revenue, from almost 100% of revenue currently."

FireEye is slated to report Q4 earnings on Feb. 11, after the close. The consensus estimate of analysts polled by Thomson Reuters is for revenue of $55.6 million, up 75% from the year-earlier quarter. They expect a per-share loss minus items of 37 cents, vs. an 11-cent loss in the year-earlier quarter.

With Mandiant, FireEye now expects 2014 revenue of $400 million to $410 million, compared with its previous guidance of $240 million to $250 million. That's vs. $83 million in 2012.

See Also

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02/20/2015 04:50 PM ET

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